scholarly journals PROBLEMS OF ENSURING THE FINANCIAL SUSTAINABILITY OF THE BANKING SYSTEM

2021 ◽  
Author(s):  
Olena Tarasova
Keyword(s):  
Financial Stability ◽  
Banking Sector ◽  
Banking System ◽  
Bank Lending ◽  
Financial Sustainability ◽  
Loan Portfolio ◽  
Bank Deposits ◽  
High Inflation ◽  
The Stability ◽  
Banking Institution

The article explores the problems of ensuring the financial sustainability of the banking sector, which plays a very important role in the functioning of the financial system of the state. The role of the stability of the banking system in ensuring conditions of economic growth is justified. It is noted that it is the financial stability of each banking institution that is a prerequisite for the stable functioning of the entire banking system. It is emphasized that since the financial stability of the banking system is influenced by a large number of internal and external factors, for the effective functioning of the banking system of the country must be ready for any challenges to the macro and microenvironment. The main problems of the banking system in modern conditions should be considered the reduction of deposits of the population, deterioration of the quality of the loan portfolio, significant devaluation of the hryvnia, high inflation rates, loss-making of a significant number of banking institutions. It was concluded that the banking system of Ukraine feels a significant dependence on the funds of depositors - individuals, and therefore on factors that affect their behavior in the financial market. Trends of formation of deposit base of commercial banks of Ukraine and imbalances in the sphere of attraction of banking resources were analyzed. The growth of bank deposits of the population is slow, negative changes in their structure are observed. The share of deposits of individuals after the 2014 crisis has become significantly more volatile and risky in terms of financial stability. The increase in lending is complicated by the presence of large portfolios of problem loans, as a result of which there are a number of tasks to increase the efficiency of the loan portfolio, which should ensure a compromise of profitability, liquidity and credit risk acceptable to the bank. The priorities of monetary policy and the main tasks are formulated, the solution of which will allow to intensify lending to the real sector of the economy. Theoretical and practical recommendations have been developed to improve bank lending, increase the profitability of the banking system and capitalize Ukrainian banks.

scholarly journals FINANCIAL STABILITY OF A BANK - FACTOR OF STABILITY OF BANKING SYSTEM

2018 ◽  
pp. 5-11
Author(s):  
Andrii Ramskyi ◽  
Inna Budnichenko
Keyword(s):  
Commercial Banks ◽  
Financial Stability ◽  
Banking System ◽  
Development Program ◽  
Financial Sustainability ◽  
Internal Factors ◽  
Financial Condition ◽  
Stage Of Development ◽  
Banking Institutions ◽  
The Stability

The article is devoted to the analysis of the financial stability of Ukrainian banks at the present stage of development and the identification of the main factors of influence that are associated with it. The main tendencies of development of the banking system of Ukraine are considered. The present state of the banking system of Ukraine is determined. Financial stability plays a significant role in planning the activities of commercial banks. In general, its indicators reflect the level of riskiness of the functioning of the entity of the banking system. Managing financial sustainability has a significant impact on the functioning of banks. That is why it is necessary to create special control departments in banking institutions. The research of financial stability of banks is based on financial sustainability indicators developed and used by the IMF and the World Bank as the basis for the "Integrated Financial Sector Development Program until 2020". The necessity of applying different methods for evaluating the financial stability of commercial banks has been established in order to identify a wider range of problems related to the efficiency of the functioning of the banking system. The description of  two main groups of factors, under the influence of which the financial stability of banks  undergoes changes, is presented. It was revealed that external factors have a more significant impact on the financial stability of a bank. In particular, the factors of mega environment have become more important when banks enter the international financial space. Internal factors lie mostly in the management plane, and it is just the inefficient management of the bank that leads to the disruption of its stable financial condition. Specific features of management of financial stability and methods of its evaluation are considered. The analysis of economic standards of the banking system of Ukraine is carried out. The measures are proposed to minimize the risks and maintain the stability of banking institutions at the required level for normal functioning in modern conditions. It has been proved that providing, supporting, analyzing and evaluating the financial stability of commercial banks is a driving force in the development of the banking system, and hence the entire Ukrainian economy.

scholarly journals Financial Sustainability Assessment of the Largest Systemically Important Credit Institutions in the Context of the Global Instability

2021 ◽  
Vol 12 (2) ◽  
pp. 10
Author(s):  
Oksana V. Savchina ◽  
Ekaterina A. Sidorina ◽  
Olga V. Savchina ◽  
Petr S. Shcherbachenko
Keyword(s):  
National Economy ◽  
Financial Stability ◽  
Banking Sector ◽  
Sustainability Assessment ◽  
Banking System ◽  
Capital Adequacy ◽  
Business Strategies ◽  
Financial Sustainability ◽  
Management Efficiency ◽  
Asset Quality

The national banking system is the driver for the national economy that unites various types of credit organizations that operate within a single monetary mechanism. The banking system is a part of the economic “organism”, whose condition determines the stable development of society. The problems that currently exist in the banking sector reflect instability of the entire economic situation in the country. The reasons are a reduction in budget support for organizations and the inability of some of them to adapt to changing external conditions. In crisis conditions, it is of particular interest to assess the financial sustainability of the activity of the largest systemically important banks in the country, which are the “circulatory system” of the national economy. This article assesses the financial stability of PJSC “Sberbank of Russia” based on an analysis of the main groups of its performance indicators for 2007-2019: capital adequacy, asset quality, management efficiency, profitability and liquidity. According to the research results, it is revealed that during the period under review, the activity of Sberbank is stable with respect to such indicators as capital adequacy, profitability, management efficiency and liquidity. Bank activity is unstable relative to asset quality indicators. The high value of the asset quality ratio characterizes the increased degree of riskiness of operations conducted. The ratio of overdue debt is above the norm, which adversely affects the financial stability of the bank. The most important achievement of Sberbank of Russia in 2019 - the launch of a new digital platform of the bank. The use of artificial intelligence technologies has already become an important driver of Sberbank business. Due to the pandemic of COVID-19, the Russian banking sector may face a number of problems. By 2021-2022, the growth is expected only by those banks that will build an effective risk management system and will be able to adapt their business strategies to the new economic realities and tougher requirements of the regulator.

scholarly journals CREDIT RISK OPTIMIZATION FROM THE POINT OF VIEW OF BANKING INSTITUTION: THEORETICAL AND APPLIED PRINCIPLES

2021 ◽  
Author(s):  
Iryna Khoma ◽  
Yuliia Myrhorodets
Keyword(s):  
Credit Risk ◽  
Business Strategy ◽  
Financial Stability ◽  
Banking Sector ◽  
Bank Lending ◽  
Point Of View ◽  
Credit Expansion ◽  
Risk Optimization ◽  
Debt Collection ◽  
Banking Institution

The implementation of effective banking activities helps to maximize the profits of the banking institution, because it is due to credit operations that the main part of the profits coming to the reserve funds is formed, as well as directed to the payment of dividends to the bank's shareholders. Therefore, minimizing credit risk and solving the problem of non-performing loans are one of the key priorities in developing a banking business strategy. Credit risk is the risk that a borrower will default on its principal debt and interest on its use. Credit risk management (its minimization) is carried out by means of the following measures: credit limitation; diversification of the bank's loan portfolio; control over the use of credit and efficiency in debt collection; credit insurance; sufficient and high-quality collateral for loans; analysis of the borrower's creditworthiness. The share of non-performing loans (NPLs) in Ukraine was 48.4% at the beginning of 2020. It has remained extremely high in recent years, although it has been gradually declining since 2018. The high share of NPLs is the result of credit expansion in previous years, when borrowers 'solvency standards were low and creditors' rights were insufficiently protected. Another important reason is the practice of lending to related parties who stopped servicing loans during the crisis. Today, all non-performing loans are recognized by banks, the level of coverage of their reserves is constantly growing and is approximately 95%. Strategy formation regulation and minimization of credit risk in scale government (at the macro level) is necessary to achieve financial stability of the banking sector. The purpose of the strategy is to regulate and minimize credit risk at the bank level (at the micro level) should be in the location optimal ratio between profitability, risk and liquidity of the bank's credit operations. This article analyses the state of bank lending in Ukraine and develops a method of optimizing credit risk in terms of protecting a banking institution. The distribution of credit risk of Oschadbank JSC and the level of non-performing loans of the bank are analysed. Recommendations for the protection of a banking institution in terms of optimizing the existing credit risk are given.

Assessing the Inter Bank Disparity in Non-Performing Assets (NPAs) Management in Indian Public Sector Banks

GIS Business ◽  
2017 ◽  
Vol 12 (5) ◽  
pp. 49-59
Author(s):  
Dhananjaya K. ◽  
Krishna Raj
Keyword(s):  
Public Sector ◽  
Financial Stability ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Banking System ◽  
Financial System ◽  
Public Sector Banks ◽  
Recovery Mechanisms ◽  
The Stability ◽  
The Global Financial Crisis

In a bank-dominated financial system like India, the strength of the overall financial system or financial stability highly depends on the soundness of banks. Indian Banking system proved to be strong and resilient during the global financial crisis of 2008. But of late, there has been increased concerns about the continued deterioration in the stability of the banking sector. Financial stability report of RBI confesses to the fact that the risks to Indian banking sector have been increasing in the post-recession period particularly the risk of accumulating NPAs. This study attempts to analyse the trend in profitability, NPAs, and the effectiveness of recovery mechanisms and interbank disparity in NPA management with respect to public sector banks. We found that the profitability of public sector banks is declining in the post-crisis period and the amount of NPA has been on the rise. Further, the recovery mechanisms have proved to be ineffective in containing the problem of bad debts.

scholarly journals DEVELOPMENT OF A MECHANISM FOR MANAGING THE INCOME OF FINANCIAL AND CREDIT INSTITUTIONS IN THE CONTEXT OF ECONOMIC MODERNIZATION

2021 ◽  
Vol 80 (1) ◽  
pp. 53-58
Author(s):  
G. P. Koptayeva ◽  
◽  
M. Kanabekova ◽  
Ye. Zh. Yertayev ◽  
A. B. Orazbayeva ◽  
...  
Keyword(s):  
Financial Management ◽  
Financial Stability ◽  
Banking Sector ◽  
High Efficiency ◽  
Banking System ◽  
Economic Security ◽  
Practical Implementation ◽  
The Stability ◽  
Definition Of ◽  
Credit Institutions

The research is caused, firstly, by the need to specify the definition of financial and credit institutions as subjects of the banking sector of Kazakhstan, analyze and evaluate existing approaches to managing their stability in the strategic aspect and identify factors (possible threats and dangers) that lead to loss of financial stability, and, secondly, by the need to develop a mechanism for managing the financial profitability of financial and credit institutions, ensuring their stable position both in the short and long term. To improve the quality of financial management and ensure the profitability of financial and credit institutions, it is necessary to justify and develop a strategy for managing their financial stability. At the same time, it should be borne in mind that even with high efficiency and profitability, insufficient attention to the issues of ensuring the stability and economic security of financial and credit institutions can lead to financial difficulties for them. Taking into account the problems discussed above, the relevance of issues related to improving the stability mechanism of financial and credit institutions has significantly increased, as has the need to find a new methodological apparatus aimed at adapting and studying foreign experience and its practical implementation in the domestic banking system.

scholarly journals IMPACT OF THE SUBJECTIVE FACTOR ON THE STABILITY OF UKRAINIAN BANKING SYSTEM

2018 ◽  
pp. 178-195
Author(s):  
Nataliia Pogorelenko
Keyword(s):  
Financial Stability ◽  
Banking Sector ◽  
Banking System ◽  
Qualitative Evaluation ◽  
Complex Nature ◽  
Net Profit ◽  
Subjective Factor ◽  
The Stability ◽  
Multifactor Regression ◽  
Financial Result

Introduction. Proceeding from the axiomatic nature of the assertion that the system is stable only if both central bank and second-level banks are stable, the article focuses on the nature and connection between the general financial stability indicator (financial result) and particular banking groups: systemic (at the moment consists only of the state banks), banks with foreign capital and other banks. This choice has an objective precondition, taking into consideration the difficulty in implementation of the author's approach because of the need to use a correct sample for calculations on one hand, and frequent methodological changes in statistical sources, on the other hand. The obvious fact is that each of these banking groups has not only certain features of its own activities in the banking services market but also indirectly or even directly influences the functioning of the entire banking sector in Ukraine. Purpose. The article aims to assess the qualitative impact of individual quantitative factors on the key indicator of the efficiency of banking institutions which is net profit (or loss), at the level of individual groups, as well as on the system as a whole. Method (methodology). We build multifactor regression models to determine the dependency between net profit (loss) and various quantitative parameters that describe a particular banking group as well as banking system as a whole. Results. The results of the research have clearly shown which of the factors can influence the financial outcome for outlined banking groups. We have also discovered additional quantitative factors of influence on the banking sector profit. These factors were not included into any of the models on the group level. This result vividly confirms the initial thesis about the complex nature of connection between quantitative factors of distinct banking groups and endpoint financial result of the banking system. It demands a deeper qualitative evaluation of efficiency of its functioning both on micro- and macroeconomic level.

scholarly journals ASSESSMENT OF FINANCIAL SECURITY OF THE BANKING SYSTEM OF UKRAINE

2020 ◽  
pp. 51-58
Author(s):  
Davydenko N. ◽  
Kolodiazhna V.
Keyword(s):  
Financial Stability ◽  
Banking Sector ◽  
Banking System ◽  
The State ◽  
Financial Security ◽  
Monetary System ◽  
Characteristic Features ◽  
The Stability ◽  
Financial Monitoring ◽  
High Level

Today, the basis of financial security of the state is to ensure the stability and security of the banking system, because the decline in confidence in banks causes damage to the financial security of the whole country. The purpose of the article is to study the essence of financial security of the banking sector and develop proposals for its strengthening based on an assessment of the state of the banking sector at this stage of economic development. The primary tasks of the banking system are the stabilization of the monetary system of the state, the accumulation of financial resources of society, ensuring the stability of the national currency, which together have a signi-ficant impact on its financial security. That is why it is necessary to determine the state of the banking sector of the state in terms of its ability to withstand internal and external negative factors in the banking process. Therefore, the state of financial security of the banking system is subject to constant analysis, especially in our time, due to the difficult military-political situation and economic instability in the country, which has negatively affected the activities of commercial banks. The article presents the main indicators of the banking sector of Ukraine during 2014–2019, which provide an opportunity to analyze trends in its state under the influence of internal and external factors. The main characteristic features of the banking system of Ukraine in the conditions of modern challenges are determined. According to the results of the analysis, it can be stated that the state of the banking system of Ukraine is quite unstable, primarily due to the change in the structure of the banking sector and the fact that Ukraine is on the way to overcoming the crisis of the banking system. As a result of the research, measures have been identified to ensure the stability of the banking sector and increase the level of financial security of the banking system. It is established that in order to further ensure the stability of the financial security of the banking system of Ukraine at a high level, considerable attention should be paid to improving the banking management system and tools of state financial monitoring of the banking sector.Keywords: financial security, state, banking system, solvency, financial stability. У статті визначено сучасні підходи до визначення сутності фінансової безпеки банківської системи держави, як основної складової її економічної системи. Визначено основну мету підтримки фінансової безпеки банку та структуру банківського сектору держави в розрізі його платоспроможності. Здійснено оцінку основних показників діяльності банківського сектору держави та проведено аналіз сучасного його стану протягом 2014–2019 рр. на основі офіційної статистичної інформації Національного банку України. Визначено вплив націоналізації ПАТ «Приватбанк» та обґрунтовано основні її наслідки для державної частки банківського сектору. Охарактеризовано ефективність функціонування банківської системи України, а також вплив банківської реформи на нівелювання наслідків кризи банківської системи.Ключові слова: фінансова безпека, держава, банківська система, платоспроможність, фінансова стійкість

scholarly journals Management of Liquidity Risk and the Banking Activity

2019 ◽  
Vol 8 (2) ◽  
pp. 01-08
Author(s):  
Leonora Haliti Rudhani ◽  
Driton Balaj
Keyword(s):  
Commercial Banks ◽  
Financial Stability ◽  
Banking Sector ◽  
Banking System ◽  
Liquidity Risk ◽  
Risk Indicators ◽  
Liquidity Management ◽  
Banking Activity ◽  
The Stability ◽  
High Level

The banking sector in Kosovo continues to have a high level of sustainability and financial stability. Two substantial components for the stability of the banking system appear to be liquidity and liquidity risk. The purpose of this paper is to analyze liquidity management in Kosovo's commercial banks through liquidity risk indicators from 2008 to 2017. By comparing the methodology of the data presented, the study will assess the state of management of the liquidity risk of commercial banks. From 2008 until now, commercial banks in Kosovo have had liquidity reserves at a level higher than the level required by CBK, which means that exposure to liquidity risk was minimal.

Financial (Il) Literacy And Stability Of The Financial System

GIS Business ◽  
2019 ◽  
Vol 14 (4) ◽  
pp. 163-169
Author(s):  
Dr. P. Srinivas Reddy
Keyword(s):  
Financial Literacy ◽  
Small Businesses ◽  
Banking Sector ◽  
Banking System ◽  
Financial System ◽  
Foreign Banks ◽  
Loan Portfolio ◽  
Post Conflict ◽  
The Stability ◽  
The Relationship

The aim of the author of this paper is to show the relationship between the levels of financial Literacy of individuals and company’s managers and the stability of financial markets, asset Markets and the stability of the financial system as a whole. In post-conflict Bosnia and Herzegovina (BiH) economy was ''struck'' by foreign banks and financial capital that has swept the local public ''hungry'' for loans but also under-educated in the financial sense to borrow and use borrowed funds more effectively and accept tolerable burden of debt. Financial illiteracy and the willingness to accept the conditions imposed by banks have led to difficulties in servicing obligations and deteriorating loan portfolio of banks. In such circumstances, the onset of the financial crisis has brought something positive. The trend of rapid borrowing of citizens and companies in BiH was abruptly cut, but on the other hand problems with servicing the loan already taken simultaneously arose. The problems are still not dramatic but it should be noted that problems in the banking sector come to the surface only after one and a half to two years after the crisis. The author believes that a more serious approach to the financial literacy of citizens and managers and owners of small businesses is crucial, not only for the economy as a whole but also for the health of the banking system or financial system of the country.  

scholarly journals DYNAMICS OF MAIN INDICATORS OF THE CANADIAN BANKING SYSTEM

2020 ◽  
Vol 6 (3) ◽  
pp. 136-142
Author(s):  
Maryna Korol
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Banking System ◽  
Practical Significance ◽  
Loan Portfolio ◽  
The World ◽  
The Stability ◽  
Canadian Banking

Relevance of research. During the global financial collapse of 2008–2009, Canadian banks demonstrated stability and vastly avoided the international crisis. There was a view that Canada’s banking system was strict and overly risk-oriented, but after the crisis, it was recognized as logical in terms of lending, which required careful government supervision and regulation based on the principles of security and reliability. In fact, the World Economic Forum recognizes Canadian banks as the most stable in the world. So, all mentioned above prompted us to study the dynamics of the main indicators of the Canadian banking system. The aim of the study is to summarize and characterize the existing trends of banking system evolution in Canada. Methodological basis of the study is based on the analysis of the study of the Canadian banking system according to the indicators of the number of banking institutions, their profitability / loss, the quality of the loan portfolio and analysis of the largest banks in the country. A systemic analysis of the quantitative and qualitative composition of the above-mentioned banking indicators, synthesis and generalization were used to generalize and formulate conclusions. Scientific results. This article is devoted to the study of the dynamics of the main indicators of the Canadian banking system during the period from 2000 to 2019 inclusively. It is argued that the number of commercial banks has had a positive dynamics during the analyzed period, even the period of the global financial crisis of 2008-2009 has not reduced their number, which indicates the stability and prudent policy of commercial banks and the Central Bank as a whole. It has been established that 2019 is the year of the historical maximum assets of the Canadian banking system (more than 277% of Canada’s GDP). It is shown that the assets of eight largest banks in Canada account for 91% of the total assets of the banking sector. A record decline in the bank’s profits was recorded in 2009. The quality of the loan portfolio of commercial banks in Canada since 2009 shows a significant decrease in the share of outstanding loans. The practical significance of the study is to rate the strengths and weaknesses of the Canadian banking system. Significance / originality. The results achieved form an integrated view of the functioning of the Canadian banking system. The following studies will focus on methods and models for verifying the stability of banking systems, including the Canadian banking system.

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